Do Women Make Startups More Successful? If So, How?

Last week Dow Jones released a report about how venture-backed companies with senior female executives are more likely to be successful than those without. The report, titled “Women at the Wheel,” did not provide any specific evidence as to why this phenomenon takes place, rather only citing, stats such as “ At successful companies, the median proportion of female executives was 7.1%; at unsuccessful companies, 3.1%. – demonstrating the value that having more females can potentially bring to a management team.” (Based on more than 15 years of venture-backed company data and executive information in its VentureSource database.)

The Wall Street Journal’s coverage of the report correlated it with an opinion that attitudes about women in technology are changing rapidly and that female participation continues to increase in this sector. I’ve worked with technology companies for about 20 years now – many that are startups. It’s still very rare that we receive a call from a startup led by a female CEO or even a co-founder. I do see women in the tech sector – but more often than not, they are in marketing or HR positions. This sentiment was echoed in the report, which stated that only 1.3% of the companies had a female founder, 6.5% had a female CEO, and 20% had one or more female C-level executives, most commonly in sales and marketing roles - accounting for 27% of the total population sample.

Of course, there are exceptions. We are all aware of the higher profile – yet still rare – examples at FacebookFacebook, GoogleGoogle and YahooYahoo! “I don’t’ know if numbers are increasing but they help change the perception that women can’t be tech leaders,” said Diane K. Danielson, Chief Platform Officer at Sperry Van Ness International.

Dow Jones stated, “We see a company’s odds for success (versus unsuccess [sic]) increase with more female executives at the VP and director levels.” And, although they explain what “success” means (defined as exited through an initial public offering (IPO), in IPO registration, privately-held and consistently profitable or has been acquired for an amount greater than its total venture investment), the report does not directly correlate any specific reasoning here. Could it be that there is none?

“There are ‘lots of great examples [of successful women in tech] at Google,” said Don Dodge, Developer Advocate at Google. “Marissa Mayer was employee #20 and a clear leader at Google for many years. Sheryl Sandberg was a major leader at Google, and now COO at Facebook. Megan Smith has a huge job running Business Development. Susan Wojcicki runs the most important engineering group at Google. There are many more, less visible, women leaders at Google. In every single case it is about their abilities, not their gender. Tech is one of those fields where it is ALL about ability.”

He has an interesting viewpoint – what’s gender got to do with success? There are a lot of statistics, figures and charts in the report, yet there is no attempt at an explanation as to why women specifically would make startups more successful. It’s odd, given the title of the report – they don’t dig deep to answer their own question, do they? How do we know, based solely on numbers of females employed at the executive level, if that is the reason for success? And are there correlating reports around the number of men employed at successful startups?

This very question calls to light an entire other discussion, as Marcy Massura, Digital Supervisor at Weber Shandwick said, “I always find this type of question [if attitudes about women in tech are changing] humorous. I think the very fact that it is being asked shows that not much has changed. Sure, the needle has moved a little, and there are a few more women in leadership roles, but the mockery of their very existence and the questioning of their abilities (especially if they are mothers too), is still in the forefront of their coverage.”

Clearly, while some people do see attitudes changing towards women in tech, others feel we’re still way behind, especially when reports like this are published – with no specific reasons that women at the helm would make a company more successful. Because, isn’t that what we’d really want to know? If in fact, women leaders do make companies more successful?

“Women are better equipped project managers, which is a good match with a technology industry that needs organization – and often a different vision – to realize its full potential. For that reason, women in technology will continue to be an emerging track for top talent,” said Thomas McFeeley, a Chicago-area tech PR executive.

Perhaps, but since the majority of women in tech right now are still in marketing and sales, maybe it’s just that we’re better at promoting and selling – which is of course, the lifeblood of any successful company. Perhaps when we start to see the numbers of startup females with titles such as “Founder,” “CEO” and “Board Director” increase closer to 50%, we can try this report again. Until then, I for one am still pondering why exactly the number of female executives in a company would – or would not – make it more successful. Get more of us in the Boardroom and maybe we can start pumping out some really interesting research.

What do you think? Are there specific reasons women executives help make or break a startup? Should VCs be encouraging more women at the helm?

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